The Institute of Risk Management has described risk culture to be “the values, beliefs, knowledge, attitudes, and understanding of risk shared by a group of people with a common purpose”. An organisation with a good risk culture translates to everyone being on the same page, everyone having a deep sense of understanding of the organisation’s approach to risk, and being aware of the policies, practices and responsibilities for managing risks.

What is Risk-Ready Culture and Why is it the Need of the Hour?

A risk-ready culture enables organisations to quickly adapt to changing environments which could be external or internal. For instance,
If you are thinking of implementing processes which step out of a strategic vision, you will need a risk-ready culture to quickly adapt to the change in processes and pick up where you left off.
A risk-ready culture is also adept in financial risk tolerance, with a deep focus on organisational resilience.
A risk-ready culture would also look like quickly adapting to consumers’ ever-changing needs without deeply impacting operations.

A global pandemic has taught us that being risk-ready can make or break your organisation in the long run. When competition is cutthroat, only organisations with a strong risk appetite can thrive.

What Does a Risk-ready Culture Look Like?

In short – an organisation with a risk-ready culture looks resilient! Clear communication and solid leadership are at the base of every risk-ready organisation. At the heart of this should be a culture of openness to risk, as opposed to an aversion that should trickle down to every employee. Risk-ready organisations will have parameters to continuously evaluate risks so that measures can be taken on time to limit or curb any risk. In a risk-ready culture, the concept of risks should be normalised to a point where employees view risk as something easily solvable.

The Role of HR in Building Risk-ready Culture

Just as Rome wasn’t built in a day, building a risk-ready culture is a process which will take time, but it is always worth it in the end. As a starting point, here are a few ways in which HR leaders can enable and foster a risk-ready culture:

Encouraging communication

By keeping employees in the loop and encouraging communication, not just from middle management but also from the top will go a long way in making every employee feel included and heard. While risks can and should be communicated via in-person meetings, emails and one-on-one meetings, HR should also organise regular hands-on meetings with key leadership present in a formal setting, so that expectations are set, and any questions or doubts are cleared in an open setting. This helps employees see the bigger picture and understand the importance of being risk-ready.

Create learning materials highlighting updates on risks

Another great way to facilitate a risk-ready culture as an HR leader is to ensure that knowledge transfer is robust in the organisation. Presenting teams with bimonthly materials can go a long way in training different teams to be aware of upcoming risks in their departments and how they can tackle them head-on.

Incorporating customer feedback and implementing quick strategies or pivots to adapt

Identifying trends in customer feedback and taking actionable corrective measures is very important when it comes to risk management, and HR leaders can work to have systems in place which allow teams to quickly adapt to consumer trends to avoid risks that may present themselves, this is especially applicable for organisations that provide services.

Evaluating the risk readiness of the organisation

As an HR leader, it is important to gauge the readiness of each function in the organisation as each department might have its own unique threats and risks to mitigate. Having regular audits and surveys with key stakeholders will help the organisation evaluate risk readiness as a whole. HR leaders should also make sure that there is an escalation matrix in place so that no risk slips through the cracks, and everyone in the organisation is aware of the process and is accountable.

Rewarding risk-readiness across the organisation

From bonuses and certificates to special mentions, there are many ways to appreciate and reward risk-ready behaviours, this can be for an entire department or to a single worker. Rewarding and recognising efforts taken to be risk-ready often do wonders for the culture of the organisation.

Harnessing technology to enable the workplace to be more risk-ready

A risk-ready culture will follow a strategic approach to optimising operations with the help of technology, this means you are keeping up with the trends and mitigating risks of being outperformed by competition because of not harnessing and adopting emerging technologies.

Challenges in Building a Risk-ready Culture (and How to Overcome Them)

Risks don’t isolate themselves; they are integrated into ecosystems:

In today’s hyper-connected world, the connected nature of operations poses several risks and can penetrate through the organisation if not nipped in the bud. One strategic move might be disrupted by tactical events in the business. Therefore, business operations should only be executed keeping in mind the long-term effect. Siloed infrastructure can invite all kinds of risks and must be drilled down regularly and then integrated to streamline risk management strategies.

Adopting a flexible and scalable approach:

Risk management is an ongoing and endless effort that is crucial to enable a business to thrive. HR leaders must hold frequent assessments of risks and schedule meetings with managers for discussions routinely, this helps organisations stay ahead of the game.

Solidifying the future with learnings from the past:

A risk-ready organisation should provide a strong emphasis on learning from mistakes and errors and using them as deep and rich insights that can mitigate future risks. This is important in creating an open and responsible culture where everyone is accountable.

Hosting regular compliance training:

It can be a challenge to be up to date with compliance for every department, but this is crucial in building a risk-ready culture. Employees need to be aware of the risks to successfully mitigate them.

Getting an organisation risk-ready is no easy task, which is why you should leave it to the experts. At Pierian Services, we enable our clients to focus on the environment to mitigate strategic, financial and compliance-related risks by harnessing the correct talent support. We can help transform your organisation into a culture that thrives on risk appetites. Reach out if you’d like to know more.